Following a meeting with management in Denver, Citigroup reiterated its "buy" rating and $350 price target. Chipotle closed at $308.13 on Thursday.

Chipotle shares peaked above $440 on April 9, but dipped after the company missed analysts' estimates in July. They are little changed, however, since a presentation in October by hedge fund manager David Einhorn, who argued the chain was facing stiff competition from Yum Brands'(YUM) Taco Bell, which has lower prices and a new upscale menu called "Cantina Bell."

Other big chains, including McDonald's(MCD) , are increasingly looking to appeal to more health-conscious or sophisticated consumers, with offerings such as premium coffee, "sustainably caught" wild fish and newly designed restaurants.

Chipotle is also facing competition from an increasing number of "fast casual" restaurants aimed at wealthier consumers, such as Panera(PNRA) and Cosi. Panera has 1,652 locations.

Citigroup analysts are keeping a close eye on Chipotle's plans for a price increase in 2013. The company's CFO said earlier this month that it was considering such an option.

"Management has not committed to a price increase in 2013, but it is clear that pricing is being considered and would probably be in the 4% range. CMG perceives more risk around the frequency of pricing than in the magnitude and, hence, opts for less frequent but more significant price increases," the report states.